Rupert Murdoch may have acknowledged that he finds the phone hacking scandal engulfing the News of the World 'deplorable' and 'unacceptable', but that's not stopping his clients from jumping ship and pulling their advertising from his newspapers.
His employees have allegedly infringed on privacy laws and exhibited the worst kind of journalistic practice, with an inquiry set to reveal the full extent of the malpractice. Murdoch has even been forced to pull out of his bid to obtain complete ownership of BSKyB, while his company's wrongdoing has been dragged squarely into the gaze of the public and incensed politicians.
But while this case is exceptional, it seems that hacking, data theft and insider misconduct are becoming increasingly familiar themes, and represent an emerging threat for businesses.
Take the case of T-Mobile: earlier this year two former employees were found guilty of stealing valuable company data and selling it on for a profit after a court ruled in favour of the Information Commissioner's Office (ICO). The accused pleaded guilty to the offences under Section 55 of the Data Protection Act, and will now ‘have to pay back the total of £73,000 as well as costs towards the case’.
The operation was sophisticated, with T-Mobile estimating that 556,355 customer records were traded.
The investigation uncovered how one of the men, who had by this point left T-Mobile to set up his own mobile data brokerage, would meet the other man who was still an employee of T-Mobile in a public place and be given stolen records on a USB stick, paying the latter between £2,000 and £5,000 for the data.
Worst of all for T-Mobile, the impact on its customer base and their loyalty really can't be ascertained. An unknown number will have deserted the operator as a result.
Elsewhere, the US' largest future exchanges operator CME recently confirmed that one of its former employees has been charged with data theft.
The accused is alleged to have downloaded thousands of sensitive files onto his computer and copied them onto removable storage devices, with the goal of setting up his own company in China. While CME has stressed that no customer data has been compromised, the damage such an incident could cause to its reputation is difficult to gage.
Employees who have regular access to thousands of customer details may think that attempts to use such data for personal gain will go undetected. Flexible working practice has brought huge benefits to firms, but the downside is that it makes this sort of behaviour an easier option. As ever, the buck stops with your business to ensure it doesn't happen, and having the right individuals in place in undoubtedly the best possible safeguard.
James Toovey of Langley James recommends ensuring that a thorough audit trail is in place and that employees are aware of such protective mechanisms. Companies should use the induction period of new recruits as a platform to drive this message home, with regular audits to minimise this potentially devastating form of crime.